Posted by Mike Smith :: July 21, 2008 @ 9:26 am

Here on the Lending Club blog, we’re always on the lookout for ways to help you save money. One area you might want to examine is your use of texting services. When I last renewed my cell phone contract, I noticed that both the cost of individual text/picture messages as well as that of unlimited use of these services had increased. Comparing which method would cost less is simple, but does involve a few factors.

Since billing is done on a monthly basis, you might think to compare the cost on a monthly basis. If my texting fees exceed the monthly cost of unlimited use, I would probably benefit from adding that service to my plan.

Both the added features of a new phone and time of year may skew the results in the month when you make the decision. I notice that I tend to send a lot more texts when my phone is new, when I’m traveling, near holidays, etc. So determining my average text usage from one month is somewhat misleading.

A better method is to track your usage over many months or even years. I prefer to pay on a per- text basis. I have found that while I may spend more some months, I tend to spend less most months.

Once you sign up for unlimited text usage, you can text as much as you want, but you have also committed yourself to pay an additional amount each month. By paying per text, I can limit my use each month to coincide with the amount of money I’m trying to save. If money gets tight, I can stop texting altogether and save even more.

People who would consistently exceed the cost of an unlimited text/picture messaging service by paying per message are most likely to benefit from the investment of signing up for the service. Tracking what your actual costs would have been under each option, monitoring fluctuations in your usage, as well as considering whether you want the flexibility or reducing such expenditures will allow you to make the best decision for your situation.